Headquartered in Santa Margarita in California, WarRoom Cellars was set up in 2018 with the acquisition of the Lapis Luna wine brand. Other brands under its wing include Bonny Doon, which entered its portfolio in 2019, Parducci, acquired from Mendocino Wine Company in 2024 and Simi, which WarRoom bought from The Wine Group last year.
Last month, the group snapped up the Riesling wine brand Pacific Rim. The brand was acquired from its founder Randall Grahm, who also sold Bonny Doon to WarRoom in 2019.
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Just Drinks sat down with WarRoom co-founder and president Andrew Nelson to discuss the deal, the opportunity he sees for sweeter wines and why it’s important for wine companies to specialise.
Fiona Holland (FH): To start with Pacific Rim, what was the rationale behind that acquisition and how are you hoping to grow and integrate this business?
Andrew Nelson (AN): Our strategy at WarRoom is to acquire iconic legacy wine brands and reposition them for growth by focusing on what customers love. If there is a brand that is historical and either in decline or maybe it has lost focus, those are the brands we look to acquire.
We do a deep dive on each brand through customer interviews and surveys, founder interviews if we can – but we basically try to determine what are the distributors, accounts and the consumers… What do they love about the brand?
Pacific Rim, to answer your question directly, was founded by Randall Grahm, who is the founder of Bonny Doon Vineyard and Bonny Doon is one of the brands we acquired in 2019. When I saw that Pacific Rim – there was a bankruptcy declared – I thought: “Oh wow, what an important brand! I wonder if we could acquire it and reunite it with Bonny Doon?”
FH: This is your first Riesling brand. What opportunities do you see for Riesling? With white wine, lighter styles, there generally is globally a trend towards that but was that part of your reasoning for acquiring Pacific Rim?
AN: There’s three Rieslings [under Pacific Rim]: a dry, an off‑dry (which is 25 grams of residual sugar) and a sweet (which is 75 grams of residual sugar). Balanced though, not cloying, [with] really great acidity.
We are interested to explore whether Pacific Rim could have a non‑Riesling. In the early days there was a Chenin Blanc and a Gewürztraminer. Can Pacific Rim have an aromatic white that is not Riesling? That will be one of the questions we are asking the customers.
The secondary follow‑up would be the sweet category. The brand is about 60,000 cases, with around 50,000 being the sweet. It is really rooted in that sweet Riesling, and, if that is the positioning, then the question becomes: can there be another sweet wine – a sweet Moscato or a sweet and sparkling? But we will really let customer feedback drive that.
FH: Is Pacific Rim sold only in the US, or is it in any export markets?
AN: There has been export in the past but there is not currently that I am aware of.
FH: Are you looking to take it to export markets?
AN: We love our export markets. Bonny Doon has some great placements… with some of our other brands we have done business with Tesco before.
Until the recent trade wars, Canada was a major customer for us and we look forward to selling them wine again.
There isn’t currently export customers for Pacific Rim but our goal would be that there would be.
FH: Is the US your largest market overall, and where are your main export markets?
AN: The US is our largest, Canada was our second. We export to the UK, to Japan, Puerto Rico, Greece, Austria, New Zealand… There are about 20 or more export markets.
FH: On Canada, how has the halting of orders of American alcohol impacted your business?
AN: Negatively. We love Canada and have long relationships with some of the buyers and importers there, so I am sad. But look forward to it being behind us. I would love to open that up again.
FH: Have you been increasing your sales with other export markets to offset Canada, or focusing more on the US?
AN: We had specific products that we would make for Canada. We would bottle in a French label for the SAQ, or we would bottle specifically for the LCBO, and so, we have had challenges.
There is something every single year and so it’s made us really focus on brand revitalisation, really on our process. What is our process for repositioning and then relaunching a brand? What are the tactics? We have been working very closely with all our US wholesalers.
It has been a painful experience for us but we will make it through, and it is a combination of other export markets, domestic accounts and focused execution.
FH: Your business has been fairly acquisitive in the past two to three years. Are you in talks to buy more brands?
AN: Our goal is to be a top‑ten US wine supplier. Currently, [we are] number 43 in the Wine Business top 50.
Our ambitions are to grow profitably and stand for positive, uplifting resilience in the industry
Our goal is to be a top ten and be one of the businesses that really inspires consumers to enjoy wine. We believe wine brings people together. There is just a lot of doom and gloom and negativity around the wine industry currently. We’re hoping to be a real light in that darkness. I believe deeply in the wine business and I love the wine industry and I know we’ll make it through this.
Our ambitions are to grow profitably and stand for positive, uplifting resilience in the industry. All of our brands focus on some sort of aspirational, inspiring story… and I am curious to see what Pacific Rim will show and how that can fit what we are building.
FH: At this stage then, you have your eye out for other brands but you’re not in talks to acquire any other brands at the minute?
AN: Candidly, we are. We are in talks. We are constantly looking at acquisition. I can’t [share] what it is but we are constantly active in making offers, so long as it meets our criteria.
FH: Are there types of wine that you have your eye on or that would add to the business?
AN: We are really looking to fill out that shelf space. Our focus is on the $12–20 retail [range]. We tend to go over that. But sweet spot is that $12- $20 retail.
Categories we are looking for would be sparkling, sweet wine – which we have just closed with Pacific Rim. I am very curious about sweet wine as a category. I think that is a real entry point for bringing a newer consumer.
Then, I would say anything in Napa. I get that Napa does not meet our $20 [positioning]. Our slogan is “all for wine, wine for all”, so we are trying [to meet] consumers wherever they are in their wine journey. I think it is important we have a Napa offering that meets our strategy.
FH: Looking at global trends in wine consumption, there are signs drinkers are going towards lighter styles, moving away from red. I guess sweet wine isn’t always talked about as much.
AN: I am not talking about dessert wine.
Oftentimes, we find that doing the opposite of a trend (where everybody is going), if we could do the opposite – that doesn’t always work – but we’ve found there can be real successes in that.
We have been watching the low-no movement and no sugar. I am actually more interested in the other direction: the higher alcohol, some of the sweet, flavoured [wines].
It has to fit the brand positioning. It would not make sense to do what I am talking about in some of our more traditional brands. We would never do a sweet, flavoured wine with Parducci, unless it made sense.
For something like Pacific Rim, to look at a sweet, flavoured [wine] that meets the brand ethos – it stands for really good Asian food pairings. I am very curious about these categories. They are growing largely in the US and I just think it is interesting. It is sometimes a part… that wine businesses don’t really focus on.
There is a large customer for sweet wine in the world, certainly in the US. The growth of brands like XXL or Stella Rosa, or even if you go further back, like wine coolers and White Zinfandel, where it really brought a new consumer into the industry through flavours that were much more familiar.
The balance, the deliciousness is very important. I’m not talking about this cloying syrup, the balance is key.
FH: Why do you see opportunities with sweet rather than low-sugar, or low/no‑alcohol wines?
AN: Anything that gets people enjoying wine, I am all for. If it is low/no, I am for it.
We found sometimes there can be this clustering around an emerging trend where everybody launches something into that. We’ve tried to do that before but never successfully. Usually, we find if we focus on brand repositioning, being true to what the brand stands for, and then having that be the foundation, then if it does make sense for that brand to enter a trend, [and] then we would enter that.
We found sometimes there can be this clustering around an emerging trend
An example would be orange wine with Bonny Doon. We went down to four SKUs with Bonny Doon [under] the “Exploration” series and Rhône blends. In 2021, I think, we launched an orange wine rooted in Grenache Blanc and Grenache Gris – very explorative, Rhône… That was us entering a emerging trend with a brand that really made sense.
That would not had made sense with, you know, Simi – 150 years-old. It does not make sense to launch an orange wine, right?
There is a lot of focus on low and no and I am for it but I do not think it needs another entrant. If we go the other way – residual sugar, balanced residual – there is a lot less crowding. It is not fast traffic.
Most importantly, it aligns with what customers love about the brand. That is the real driver. It makes sense for the brand.
FH: With Pacific Rim specifically, what is your sales channel strategy – are you focusing on the on‑trade or off‑trade?
AN: Pacific Rim is mostly sold in off‑premise currently but that has kind of surprised me because I think the wine style lends itself so well to spicy cuisine, Asian food. I think there is absolutely room to grow that.
We really focus on wholesalers. Our first focus on customers is the wholesaler in each state and making sure that our messaging and pricing and positioning is really easy for them to sell into accounts.
FH: How do you look to stand out against competitors?
AN: From a packaging standpoint, we want the packaging to be remarkable. It is worthy of a remark, meaning if you see it somewhere on a shelf or on the table, [we want you to say], “Oh, what is that? What is going on there?”
We want the wine to really over‑deliver. It needs to taste more expensive than it costs. We do that by focusing on sourcing, on our vineyard sourcing and our focus on the brand.
FH: In the US, how do you view trading conditions and the consumer? We hear the consumer is not spending as much. Is this something you’ve noticed at WarRoom and is it something you’re looking to tackle?
AN: Consumers are very focused on value.
That really leads into some of the larger formats. We have seen lots of popularity with our litres. It’s a fairly new product for us, less than a year old but we are seeing success with “Take Me to Your Litre” from Bonny Doon. You get 33% more wine at the same price, so it is a very strong value proposition.
So, 2026 will be my 19th vintage harvest. I cannot remember a time when it was more difficult to sell wine in the US. I have worked on the production side and vineyard management side as well. But I think there is an oversupply and real challenge.
Also [on] RNDC – I don’t know how closely you’ve been following. [There has] been some huge distributor changes in the US. There are just huge shifts happening on supply, demand and route to market distribution. I think the combination of those three are just really affecting everybody.
FH: With RNDC, were you working with them?
AN: The short answer is no; we were not aligned nationally but we have some markets with RNDC. I think the greater fallout of it was all these wineries trying to find new distribution. All these other wholesalers bringing them on or deciding who to bring on.
FH: With the brands you own, do you also own vineyards?
AN: We do not acquire vineyards or facilities. We buy the brand and then we buy the inventory.
Depending on the brand, we will continue with the same vineyard sourcing or change it. Lapis Luna, we changed very early on almost all of the sourcing. Bonny Doon, [it was] really important to keep the same vineyard sourcing in place.
We make all the wine through custom crush and production contracts. Oftentimes, we will continue production wherever makes the most sense for the brand.
FH: With Pacific Rim, what is the production arrangement?
AN: We acquired about a year’s worth of inventory and over the next year we will determine where we are going to make it.
I think the Washington Riesling is fantastic quality. But I don’t know where we will produce it. The facility closed, so we would need to find a new production home for Pacific Rim.
FH: Finally, where do you see the biggest growth opportunities in wine – in terms of trends or markets, for example?
AN: I think [having a] hyper‑focus on a specific thing in the wine industry has never been more important. It did not used to be like that. You used to be able to be good at grape growing – or even okay at some of these things – distribution, marketing, and wholesale execution, wine club, events, DTC. I think now specialisation is really important in order to grow.
You are starting to see companies with some hyper-focused strategy that’s unique to them… are the ones that are growing.
Our… specialisation is revitalising declining legacy wine brands. [We are] like the rehab. We will bring it back; make it look great and delight everybody.
Focus on some specialisation, whether that is custom crush, or organic, distribution execution.
